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Bemidji City Council rejects grant for solar energy panels

Due to a combination of funding and timing concerns, the Bemidji City Council voted unanimously Monday to reject a $100,000 grant that would have helped to fund solar energy panels at The Sanford Center.

The grant came with a requirement for a $160,200 local match.

The council had been planning to wait to decide on the grant until February, when the final amount of contingency funds for the construction of The Sanford Center would be known.

But the city learned last week it could not wait.

Phil Carlson, with Bonestroo, which completed the feasibility study on the solar energy project, told the city in an e-mail that the city would need to take "significant steps" toward purchasing solar panels by the end of this month to meet grant requirements.

"Basically (Carlson was) telling us that we needed to purchase our solar panels by the end of the month because on Feb. 6, the 'Buy American' law goes into effect, and we would have to buy American solar panels, and it would be more expensive," City Manager John Chattin told the City Council in a special work session Monday evening.

He said the Sustainability Committee, which has been championing the project, has been working on trying to find assisting grant dollars and sponsorships, but the city still would be responsible for about $100,000 toward the local match.

The council last discussed the grant in December, at which point the council decided it would like to wait to see the final amount available in The Sanford Center's construction contingency funds before deciding on the solar panel grant.

However, that pot of money took a substantial hit last week.

The city last Monday sold $44 million worth of sales-tax bonds on a 30-year long-term basis at a true interest rate of 5.4126 percent. The interest rate was higher than what city staff and bond counsel expected, and it resulted in an initial shortfall of $696,038. Those funds were designated to come from the construction contingency fund, which had been sitting at $821,000.

Chattin said there now appears to be $125,000 left in the fund.

While that figure is expected still to increase, it also had been hoped to fund a new Nymore Beach and improvements to the warming house.

"People have been asking me about Nymore beach," said Councilor Jim Thompson. "People who live in Nymore want it."

Erika Bailey-Johnson, a member of the Sustainability Committee, said the committee was never 100 percent sure it had been offered the grant. She found out Thursday that the city had to have a meeting to decide whether to reject or accept the grant. She made several efforts to contact companies and individuals about support but was unable to obtain commitments.

"It was impossible to tell (them) everything about the scope of the project and all of the work that's gone into it in 15 minutes," she said.

Finding out that the grant needed to be signed by Jan. 31 made the situation "impossible," she said.

The contingency fund is expected to increase as contracts are revised and account balances are finalized.

Bailey-Johnson noted, too, that efficiency incentives for The Sanford Center will increase the fund's available dollars.

She said that those credits would have been ideal for the solar energy project.

But, she also said she understood the importance of the Nymore Beach project as well.

Unfortunately, such grant opportunities are rare.

Bailey-Johnson said she has been watching for similar grants for 3-4 years and it is very uncommon to have grants pay for capital expenditures for solar projects.

"(They are) few and far between," she said.

Councilor Rita Albrecht noted that the grant is offered through the American Recovery and Reinvestment Act and is unlikely to reappear again.